Market Commentary

Daily reports from our Chief Economic Strategist.

IS IT THE WILD WEST?
Nervousness amongst many iconic market luminaries is rising with one calling the current environment the “Wild West.” In my view a major reason for this nervousness is the massive influence of the absolute dollar amount of assets in
WHAT’S NEXT?
Stocks advanced globally after the US and China reached a fresh truce in the trade war and agreed to resume talks towards a deal.. Gold and Treasuries retreated and oil is
G-20 MEETING COMMENCES TODAY
The G-20 meeting commences today. Will the outcome be a surprise? I guess it depends how surprise is defined. Countless people have offered expert opinions on what may unfold. We will
BANK OF ENGLAND GOVENOR MARK CARNEY’S REMARKS
The bullish in the debt market is at a near unanimity. Most measures are at or near record proportions. One measure of risk relative to the compensation investors receive to hold longer dated obligations is at a
HAS MONETARY POLICY EXPECTATIONS UNDEGONE A REALITY CHECK?
As noted many times the markets are suggesting the overnight rate will be lowered 0.75% by year end, a very aggressive 33% reduction. Some were expecting a 0.50% drop at the July meeting only to have their hopes dashed yesterday when one of the most
IS COMMON SENSE THE MOST NEGLECTED SENSE?
Yesterday a veteran market professional commented “experience and common sense seem to be useless commodities in the world today.” I cannot agree more with this statement especially regarding the amount of negative interest rate debt outstanding…$12.5 trillion. The amount of negative real interest rate debt outstanding is over
PONDER THIS ROBIN…$12.5 TRILLION OF DEBT PRICED AT A NEGATIVE YIELD…THE CREDITOR IS PAYING THE BORROWER…PERHAPS THE ULTIMATE BLACK SWAN EVENT
Last week, the 10-year Treasury dipped below 2% for the first time since November 2016. Six months ago the most bullish Treasury prognosticator was predicting a 2.50% rate and the consensus view was
ARE TWO UNKNOWN FIRMS THE PROVERBIAL CANARIES IN THE COAL MINE?
Natixis SA, the large French bank, plunged almost 14% yesterday after MorningStar cited concerns about the “liquidity and appropriateness” of some corporate bond holdings in a fund owned by the Bank. Natixis’s woes added to the rising liquidity fears following the
GENERALLY SPEAKING THE FED DID WHAT ALL THOUGHT IT WAS GOING TO DO
The Federal Reserve left borrowing costs unchanged and signaled an openness to future cuts based upon trade and economic activity. There was one dissent, voting to move the target range to
I WILL ARGUE THE FED WILL CHANGE MONETARY POLICY TODAY JUST AS THEY DID IN MAY
Will there be a change in monetary policy announced today at the conclusion of the FOMC meeting? At the end of May’s meeting the Committee lowered the interest rate the Fed pays on excess bank reserves for the yield was

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